THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[18:00:06] WOLF BLITZER, CNN HOST: Happening now: bloody purge. As ISIS terrorists push beyond a newly captured city, some Iraqi troops are airlifted to safety, while tens of thousands of civilians are stranded or slaughtered. Why is the U.S. standing by its strategy?

Record recall. More than 30 million cars on U.S. roads now are at risk of having faulty air bags. Are you in danger from what is becoming the largest auto recall in history?

Breaking her silence. Hillary Clinton answers questions that she has avoided for nearly a month. Did she ease controversies dogging her presidential campaign or pour fuel on them?

And signing off. After three decades of late-night laughs, we will take a closer look at David Letterman's biggest moments, and one of his most enthusiastic guests.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: Breaking news. A massive auto recall doubles in size, making it the largest in history. Up to 34 million cars may have faulty air bags made by the Japanese company Takata. That's nearly one out of every seven vehicles on the road in the United States right now. Stand by. You're going to find out if your car is at risk.

Also breaking, ISIS fighters are pushing beyond the captured Iraqi city of Ramadi, expanding their power and widening their trail of blood and terror, the Obama White House now admitting that the loss of Ramadi is clearly a setback. I will ask the top Democrat on the House Intelligence Committee about that. Congressman Adam Schiff is standing by live, along with our correspondents and analysts. They're covering all the news breaking right now.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, tonight, the White House sticking to the talking point, the Pentagon sticking to the talking point it's just a setback. But the military reality on the ground may be very different.

(BEGIN VIDEOTAPE)

STARR (voice-over): Tens of thousands of Iraqis on the run, fleeing Ramadi from ISIS' brutal takeover, now many sick and stranded in the desert.

The Obama administration defensive about what has happened.

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: Are we going to light our hair on fire every time that there is a setback in the campaign against ISIL?

STARR: Hundreds may have already been killed.

REP. ED ROYCE (R), CALIFORNIA: One of the most horrific aspects of this, of course, is, as these ISIS fighters went through the town, they massacred children, wives of the townspeople.

STARR: Less than 70 miles from Baghdad, Ramadi extends ISIS' influence.

COL. PETER MANSOOR (RET.), CNN MILITARY ANALYST: To lose this city to ISIS, the new incarnation of al Qaeda in Iraq, is a huge blow and it's one that we should not sugarcoat and say it just doesn't matter because it does matter and it matters a great deal.

STARR: Some Iraqi troops had to be airlifted out of the city.

UNIDENTIFIED MALE (through translator): Police are abandoning positions, one area after another.

STARR: In the end, there was no help from the central government in Baghdad.

MANSOOR: The Iraqi army didn't have a good sense of what was happening in the city. Clearly, the Islamic State had been making inroads over the preceding weeks and months and Ramadi was the foundation rotting from within.

STARR: Shia militiamen are gathering outside of Ramadi for a possible counterattack. Sunni tribes are asking for arms. U.S. airstrikes will continue. CNN has learned U.S. military commanders have for now ruled out special forces on the ground to help pick out targets inside Ramadi.

But after the successful raid in Syria that killed an ISIS leader and captured his wife, more ground missions could happen, as the U.S. targets leaders who have specific intelligence.

ROYCE: You run hostage operations of the situation faced by Kayla Mueller, along with two of our journalists there, Sotloff and Foley. The fact that those three were killed and this commander in ISIS presumably had a hand in it, since he ran the hostage operations, is another reason why eliminating him from the battlefield is important.

(END VIDEOTAPE)

STARR: And, Wolf, no word yet on what intelligence may have been gained about those Americans and the conditions in which they were held by ISIS -- Wolf.

BLITZER: All right, Barbara, thank you.

The U.S.-led coalition says it's launched 21 -- 21 new airstrikes on ISIS targets in Syria and Iraq, including in Ramadi. But the terror group's reach is spreading well beyond those two countries.

Brian Todd is here with more on the expansion of ISIS.

What are you learning, Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, tonight, some chilling information from U.S. intelligence officials. They tell us ISIS is moving beyond its center of gravity in Iraq and Syria, that it's increasingly using Libya as a safe haven, a foothold for logistics, for joint training with its regional allies, a place where the group could possibly plot attacks against U.S. interests or against allies' interests in Europe.

[18:05:16]

U.S. officials say top ISIS operatives have been sent to Libya for recruiting, to establish weapons pipelines back to ISIS units in Iraq and Syria. They're establishing camps, cells and using Libya as a hub for propaganda, like the recent images of Ethiopian Christians on a Libyan beach being beheaded.

U.S. intelligence officials, they tell us that the chaotic civil war in Libya has enabled ISIS to gain a foothold there, but its ambitions do not end in Libya. Analysts say ISIS is lending support to allies on Egypt's Sinai Peninsula. It's making inroads in Tunisia and with Boko Haram in Nigeria and it wants to position itself to a rival to the Taliban in Afghanistan and Pakistan, Wolf.

BLITZER: There is really some frightening concern also among European officials about the ISIS presence in Libya in North Africa on the Mediterranean, not very far, for example, from -- from Italy.

TODD: Wolf, that is a huge concern tonight among European officials. And here is what they're telling us, that it's a major concern that ISIS might try to sneak its fighters on to those migrant boats heading north from Libya across the Mediterranean to infiltrate Europe.

And when you see how far they have to go, you can see why European officials are so worried about this. It's only 325 miles from Libya to Sicily. And it's just 189 miles from Libya to the Italian island of Lampedusa. Also, this Italian coastline, analysts tell us, is not patrolled at all. So, they have got free rein to get to Italy.

BLITZER: Yes, Libya is now totally a failed state, so bad, so dangerous, the U.S. Embassy was shut down last year and evacuated, no U.S. military or diplomatic personnel in Libya right now. Brian, thanks very much.

Let's get some more on what is going on. Joining us, the ranking Democrat on the House Intelligence Committee, Congressman Adam Schiff of California.

Congressman, thanks very much for joining us.

REP. ADAM SCHIFF (D), CALIFORNIA: You bet.

BLITZER: So, now the U.S. has released the real name of Abu Sayyaf. He's the so-called chief financial officer of ISIS who was killed in that daring U.S. Delta Force raid, his real name, Fathi Ben Awn Ben Jildi Murad al-Tunisi, al-Tunisi, the Tunisian.

What role -- can you tell us, what role did he really play? How important a guy was this?

SCHIFF: He was a very important guy in terms of the financing of ISIS.

And by some estimates, they derive up to a million-and-a-half dollars a day from their -- just from their oil sales. They also have kidnapping operations. They levy fees and fines on people. So he is a key figure in their financing. Now, he is not the very top leadership of ISIS itself. But, nonetheless, he is viewed as having critical insights on how their finances are structured, who is responsible for the smuggling of oil and revenues back and forth, a lot of it over the Turkish border.

So, a lot of potential intelligence insights can be gained now from his wife, as well as the Yazidi captive, and all the documents and electronic materials that were seized.

BLITZER: Did they find a lot of documents and electronic material in that building?

SCHIFF: There was a substantial amount that was seized. We don't know yet what has been found in terms of exploiting that. My guess is that began immediately, because there is the potential for follow-on operations.

But, at this point, we're looking forward to briefing later in the week on just what we have been able to ascertain.

BLITZER: We heard from James Risch, Republican senator, a member of the Senate Intelligence Committee, that she is talking right now, Umm Sayyaf, the wife of this guy.

What is she saying? Do you know?

SCHIFF: That, I don't know.

BLITZER: But do you believe she has useful information?

SCHIFF: I think that she does. That's certainly the understanding and expectation, that she had a role beyond that of being the spouse, that she may have had her own responsibilities or certainly be knowledgeable of her husband's responsibilities. So we absolutely hope to gain insights from her.

BLITZER: Do we know if this husband and wife were directly responsible for the killing of any of those American hostages?

SCHIFF: One of the things we're going look at is what role they may have had in any hostages or what they may know about the financing of their operations by hostage-taking.

So, without commenting on any particular case, we're certainly going to want to find out any information they have on hostage-taking.

BLITZER: Where is she being interrogated?

SCHIFF: Well, I can't comment on that. I think we are working in conjunction, though, with Iraqi authorities. She is an Iraqi citizen, as I understand, and, ultimately, the decision will be made jointly about where she ought to be brought for disposition or prosecution.

BLITZER: Because what happens after they're done interrogating her, and they have gotten whatever useful information they might have? What happens to this woman? They leave her in Iraq? They bring her to the United States, they put her in a prison here? Do you know what they do with her?

SCHIFF: Well, it probably depends on what the evidence is against her. If she did have an operational role in the organization or if she had any role at all in terms of hostages, then I think there is a much higher probability that she will be brought to the United States for prosecution.

[18:10:01]

Otherwise, she may very well be provided to the Iraqi authorities. But I don't know what the disposition would be.

BLITZER: Had you ever heard of this Abu Sayyaf before this raid?

SCHIFF: I had heard the name. I frankly didn't know much about him. I certainly know a fair amount about the financing of ISIS.

But in terms of the particular personalities, there is not a lot I could have told you about him before this operation.

BLITZER: Based on what you know right now -- and, obviously, there is still more information you need to know. But based on what you know right now, was it worth the risk to those Delta Force commandos to do this raid, go in with these helicopters, these Ospreys, go in there, risk their lives to capture this guy?

SCHIFF: Wolf, I think it's a very close call, and a gutsy call by the commander in chief.

I'm going wait to see, not only what we find, because then that's just the advantage of hindsight, but what we expected to be able to gain from the intelligence, because I am very concerned about the risks. Had one of our people been killed or, worse, captured and then killed, you can imagine the reaction of the public and the momentum for further escalation in terms of our role and our boots on the ground.

So that has to be weighed very carefully. And I don't want to see us rush into a lot more of these operations without thinking about the real consequence if one of them goes bad, because these are unpredictable. And you saw just by the estimates of the number of security people that were killed by our forces, this wasn't easy by any means.

BLITZER: Was it smart to release this information, to tell the world what the U.S. tried to do?

SCHIFF: I think it is. I think we're still behind in the propaganda warfare with ISIS. And letting the world know, letting ISIS know, letting people who are watching ISIS around the world know that we can go after these people, that we do it very well, that in fact has been released. They used civilians as human shields in these operations, hid behind women. I think it is useful to get that information out.

BLITZER: All right, Congressman Schiff, I want you to stand by. We have more to talk about, including the major setback, as some are calling it, in Ramadi. What happened? Where were those Iraqi troops when the Iraqi people needed them?

We will have much more with Congressman Adam Schiff of the Intelligence Committee right after this.

(COMMERCIAL BREAK)

[18:16:30]

BLITZER: We're getting some breaking news.

CNN has now confirmed that a cruise ship has run aground near Bermuda. The ship, the Norwegian Dawn, it ran into a reef about 50 minutes ago in Bermuda's North Channel there; 2,675 people on board, we're told. We're told the ship is not, repeat, not taking in any water. There are no reports of pollution or injuries, for that matter. We will stay on top of this story, update you. But the Norwegian Dawn has run aground near Bermuda.

Let's get back to the other breaking story we're following right now, the U.S. strategy against ISIS.

We're back with a top Democrat on the House Intelligence Committee, Congressman Adam Schiff of California.

Susan Rice, the president's national security adviser, says, as a result of what happened in Ramadi over the past few days, the Iraqi military collapsing, fleeing, the city is now fully under the control of ISIS. She says this is going to be a long slog, the war against ISIS in Iraq right now. This looks like pretty much of a disaster, what happened in Ramadi.

SCHIFF: It's a serious setback. And there is no sugarcoating it.

It means, I think, we really have to redouble our efforts to get the Baghdad government to incorporate the Sunnis more fully in the military, to help better arm the Sunni tribes and give them more encouragement to rise up and challenge ISIS.

I don't think the answer is more Iranian-backed Shia militias. And I don't think the answer is American boots on the ground, but rather addressing some of the sectarian problems that have yet to peel the Sunni tribes away from ISIS.

BLITZER: These sectarian problems, as you know, and you have studied Iraq, they have been around in that part of the world for hundreds of years, the rift, the battles between Shia and Sunni.

The only reason they were contained was Saddam Hussein during his rule, he was such a butcher, such a tyrant, he could control it, sort of like Tito did in the former Yugoslavia. Now they're back to this kind of sectarian fighting that is going on. What makes you or any other analyst think that the U.S. or anyone else can stop it?

SCHIFF: Well, we're not going to solve that rift, which, as you say, goes on for practically a millennia.

But I think we also have to look at how ISIS has exploited this, because it wasn't just Saddam who kept a lid on this. It's also the fact that ISIS purposely went out and tried to stir up these sectarian instincts and frictions and divisions by blowing up Shia mosques, by antagonizing and killing the Shia.

And that, I think, has contributed to this escalation, this orgy of violence. So we're not going to be able to fully resolve that. And I don't think we should try. But I think we can and have to insist that the Iraqi government, to the best it can, tamp down these tensions. If Iraq wants to stay one country, it's going to have to find a way to be inclusive of Sunnis, Kurds, and Shia. And I don't think that these political problems that the Iraqi government has, their as yet unwillingness out to fully embrace the Sunnis, ought to compel us to put our boots on the ground instead.

BLITZER: The second largest city in Iraq, Mosul, fell to ISIS last year, a city of nearly two million people. Hundreds of thousands of people fled. ISIS remains in control. Now Ramadi, a city of half-a- million people, the capital of the Anbar province, falls to ISIS; 120,000 people have fled there.

Who knows what these ISIS troops are doing. In both of these cities, the Iraqi military collapsed, they ran away and left tons of U.S. military hardware, sophisticated military equipment, tanks, armored personnel carriers, artillery behind.

[18:20:03]

Do you support giving the Iraqi military any more U.S. military equipment that potentially could abandon and hand over to ISIS?

SCHIFF: Well, I certainly don't support them putting those kind of armaments in position where we can lose them.

BLITZER: You have any confidence in the Iraqi military right now?

SCHIFF: Well, you know, unfortunately, we have to deal with Iraqi military that they have. And we have to try to build its capacity. And there are going to be setbacks as serious as this one is.

BLITZER: Setbacks sounds like a modest word. James Risch, a Republican member of the Senate Intelligence Committee, he was just here in the last hour. He says this is a lot worse than just a setback.

SCHIFF: Well, I think it's a very serious setback.

But any way you call it, it -- it's harmful to the cause, and it's something we're going have to overcome. And it's part of the seesaw nature of this conflict. I think, as Ambassador Rice points out, this is going to be a long slog.

When you look at it overall, we have shrunk the amount of territory in Iraq that ISIS controls. That's positive. But yet, at the same point, we're way far away from any kind of a retaking of Mosul. And now we have got to retake Ramadi. And the challenges are extraordinary. But I don't think that means we can back away from a commitment to the Iraqi government and helping to arm these Sunni tribes to combat the scourge.

BLITZER: Do you think this prime minister really is a good guy, Haider al-Abadi, who took over for Nouri al-Maliki?

SCHIFF: I like Abadi. I think his heart and mind are in the right place.

The question is whether he has the ability, the capability, the political ability to bring the Sunnis in to overcome some of the Shia opposition, to overcome, frankly, the scourge of Nouri al-Maliki, who is still waiting in the wings, aggravating the sectarian divisions and wanting to make a comeback.

BLITZER: Let's see what happens, Congressman. Thanks very much for coming in.

SCHIFF: Thanks, Wolf.

BLITZER: Adam Schiff is a member -- the ranking member of the House Intelligence Committee.

Up next, we will dig deeper on all these disturbing new ISIS developments. Our terror experts are standing by.

Plus, a recall of historic proportions here in the United States. Millions and millions of cars in the United States may contain a deadly defect. We have new information every driver needs to know. Stay with us.

(COMMERCIAL BREAK) [18:26:50]

BLITZER: The ISIS commander killed in a U.S. raid in Syria is now being identified is Fathi Ben Awn Ben Jildi Murad al-Tunisi, who was in charge of oil and gas financing for ISIS. The U.S. defense secretary, Ashton Carter, called his death a significant blow to the terror group.

Bob, we learned the real name of this ISIS commander today. I never heard of him, but I'm not an expert. Had you ever heard of this guy before?

BOB BAER, CNN CONTRIBUTOR: Wolf, never heard of him.

I think he is a middling official. Dealing in stolen oil is pretty widespread that part of the world. He may have a lot of information on his computers which could be very interesting. But the real people they would like to go after are the ones that know the plans and the intentions of ISIS. The officers who led that attack on Ramadi, a lot of them are former Iraqi officers. Those are the kinds of people you want, but they're out of range. And you sort of take what you can get at the beginning of a war.

BLITZER: Colonel Reese, for the president of the United States to authorize an operation like this -- and you're a former Delta Force commander -- it's a high-risk operation. You don't want these Delta Force commandos, their helicopters, the Ospreys to be blown up, if you will. You got to think there is really some high value there, right?

JAMES REESE, CNN GLOBAL AFFAIRS ANALYST: Well, Wolf, any time you put helicopters in the air with any type of force, it becomes a higher risk-operation.

But with this type of force, with the Joint Special Operations Command and the unit going out to do this type of operation, you can't leave a Ferrari -- a Ferrari in the garage and expect it to continue to run. These guys have been doing this for almost 14 years now, and very successful.

This is what the American taxpayer pays to have these type of soldiers to do these type of operations. But here is something else. Don't get caught in the aspect of high-value target. This ISIS network is a high-value network. And there have been times where, because we don't have the home field advantage, like we used to have in Iraq -- we could walk the streets -- we are out there now.

We have to find a slot and a chance to get in. So we can -- we find that intel, we grab that guy, we grab the other intel, it starts to implode the rest of the network. BLITZER: But, Fran, you worked in the White House for President Bush.

You were the homeland security adviser.

For the president of the United States to approve a raid like this, with all the dangers involved obviously to those Delta Force commandos, you got to think that there is something really huge at the end.

Look, I don't -- Colonel Reese is right. If you have got a target of opportunity -- and the special forces are very experienced now this many years into a war. But let's remember, this is an operation that was incredibly risky. One's got to believe that they thought there was more than this sort of, as Bob Baer said, mid-level guy, who -- by the way, there are less oil revenues because we have spent -- there's been air operations to disrupt those oil fields.

And so whether or not this guy was involved in an American hostage holding or killing, whether or not he had access or they believed there was a more senior-level individual in or about that compound, those are the things that the administration and the intelligence community aren't talking about. But you've got to believe there was more than just this mid-level guy there.

[18:30:24] BLITZER: Yes, you've got to believe that for the president to authorize a risky mission like this. There's got to be something else there.

Bob Baer, let's talk about the collapse of the Iraqi military in Ramadi, the capital of the Anbar province. They fled. They left a lot of equipment behind. You think -- do you have confidence that the Iraqi military can regroup and retake Ramadi?

BAER: No. There's no way, Wolf, that the military can do it. It's just not there. There's not been enough time for training, equipping. It doesn't have the morale.

I think the Shia militias could probably take Ramadi with a concerted effort with our help, the help of the Iranians, as well. But the problem is at what price? Would you have to flatten that city? And that's pretty much what happened in Tikrit. It was flattened. And it sent a message to the Sunnis they're in trouble. And what happens when they're in trouble is they tend to ally with the Islamic state, which is exactly what we don't want, of course.

BLITZER: Well, what's -- Colonel Reese, you were just there in Iraq, and you've been there many times. What's your analysis about the Iraqi military right now? Because you know a lot of us, we've lost so much confidence in their capability, despite the decade of training, financing, arming them by the United States?

REESE: At the soldier level, Wolf, they've got some great soldiers. They're got a great Special Forces capability that we've trained. One of their biggest problems right now is in leadership at the more -- you know, the company command, battalion command, brigade level and the logistics to help them command.

But Bob is right. With the Iraqi security forces, Hadi al-Amari, a former member of parliament and now is the Badr commander, who Ben Wedeman interviewed in Tikrit in March. He's got 3,000 of the Badr Corps out at Habaniya (ph) base between Fallujah and Ramadi.

So it's going to take a combination of all the elements of national power that Iraq has to get Ramadi back.

BLITZER: Fran, quickly, you have confidence in the Iraqi military?

TOWNSEND: Look, we've had too much experience to have confidence that they could do it alone. I agree with Colonel Reese and Bob Baer. I really think what you've got to do is have all elements but not only Iraqi power, but you have to have American support.

Look, American -- real American support could have helped to prevent the ISIS taking of Ramadi, and we failed the Iraqis. Not only were the Iraqis weak themselves.

Just ahead, the largest automobile recall in American history. Millions of cars on U.S. roads may have a fatal flaw.

Plus, Hillary Clinton breaking her silence, facing a volley of questions about some of the controversies dogging her presidential campaign.

(COMMERCIAL BREAK)

[18:37:42] BLITZER: Some more breaking news. Exploding air bags blamed for at least five deaths. They're prompting the largest auto recall in American history. Millions of vehicles, including some of the most popular cars on American roads right now.

CNN's Tom Foreman is here in THE SITUATION ROOM. He's got details. Tell our viewers what they need to know about this recall.

TOM FOREMAN, CNN CORRESPONDENT: Wolf, this is really stunning and alarming. You're talking about an unprecedented recall involving 34 million vehicles, almost a dozen car companies, and a truly lethal defect.

(BEGIN VIDEOTAPE)

FOREMAN (voice-over): Exploding air bags that can fire bits of metal at passengers with so much force, police say some victims look as if they've been shot or stabbed. U.S. Transportation Secretary Anthony Fox said today the recall will save lives.

ANTHONY FOX, U.S. TRANSPORTATION SECRETARY: The air bag inflators we suspected did not work correctly. And we believe that they have been responsible for at least five deaths in the United States.

FOREMAN: Serious injuries, too. Corey Burdick was in an accident in Florida. His lawyer says the air bag should have protected him.

UNIDENTIFIED MALE: Instead, the air bag exploded and sent a 3 1/2 inch piece of steel into his face, taking out one of his eyes. Now he's horribly disfigured, unfortunately.

FOREMAN: The air bag manufacturer is the Japanese company Takata, one of the biggest in the world. And for months, Takata has tried to limit the recall, saying the accidents occur only in areas with very high humidity. The government, unsatisfied with such claims, pounded Takata with more than a million dollars in fines.

FOX: Up until now, Takata has refused to acknowledge that their air bags are defective. That changes today.

FOREMAN: The most serious accident so far have involved Hondas. But the recall also involves Fords, Chrysler, Mazdas, BMWs, in all, 11 manufacturers and part suppliers so far. And the recall process could be a long one.

UNIDENTIFIED MALE: The big question is how long is this going to take? Nobody knows that yet. There is no question, it could be some years.

FOREMAN: The manufacturer issued a statement saying it remains committed to consumer safety, but like the government, it does not yet know why the air bags are exploding. Although Takata has devoted tremendous resources to these efforts with some of the leading researchers in this field worldwide, it is clear that this is a complex issue which takes time to fully evaluate.

(END VIDEOTAPE)

FOREMAN: So if you don't know if your car is on this recall list, officials urge you to go to the website SaferCar.gov -- SaferCar.gov -- and find out. And if your car is there, or you already know it's on the list, they say you should immediately contact your local dealership and arrange for the necessary repairs.

Wolf, we were really never seen anything quite like this in the automotive business in this country.

BLITZER: More than 30 million cars.

FOREMAN: Unbelievable number. And a lot of people out there in danger.

reporters today for the first time in four weeks. The Democratic presidential candidate faced a volley of questions, five specifically, about some of the controversies dogging her campaign.

Our senior Washington correspondent, Jeff Zeleny, is traveling, covering her campaign in Iowa right now. She was talking about small businesses. But Jeff, that's not what reporters wanted to question her about, was it?

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: Wolf, Hillary Clinton knows better than most that presidential candidates must take questions from voters, and occasionally from reporters. But this criticism was threatening to overtake her message. That's why she relented today in Cedar Falls.

ZELENY (voice-over): For the first time in 28 days, Hillary Clinton answered reporters' questions.

CLINTON: Well, hello, everyone.

ZELENY: About the long wait to see her State Department e-mails.

CLINTON: I have said repeatedly I want those e-mails out. Nobody has a bigger interest in getting them released than I do.

ZELENY: The release of more than 50,000 pages of e-mails could take until January of 2016. But a federal judge said today they should come sooner, in small batches every two months.

Clinton said she agreed, never mind that her decision to use a private e-mail server started the whole controversy.

CLINTON: I'm repeating it here in front of all of you today. I want them out as soon as they can get out.

UNIDENTIFIED FEMALE: How are you?

ZELENY: The criticism for not taking questions, as other candidates do, overshadowed her campaign swing through Iowa. She defended her relationships with some controversial Clinton allies.

CLINTON: I have many, many old friends. And I always think that it's important when you get into politics to have friends you had before you were in politics. And to understand what's on their minds.

ZELENY: She downplayed the influence of her friend Sidney Blumenthal, who sent her private e-mails on Libya, which she then passed around the government. She did not say whether she knew he had business interests at stake. CLINTON: He sent me unsolicited e-mails, which I passed on. I'm

going to keep talking to my old friends, whoever they are.

ZELENY: She also defended the Clinton Foundation and its foreign donations.

CLINTON: I am so proud of the foundation. I'm proud of the work that it has done and that it is doing. I'll let the American people make their own judgments.

ZELENY: On the Iraq war, an issue tripping up Republicans, she made her regret clear.

CLINTON: I know that there have been a lot of questions about Iraq posed to candidates over the last weeks. I've made it very clear that I made a mistake, plain and simple.

(END VIDEOTAPE)

ZELENY: Now, she avoided all of the missteps of some of her Republican rivals on the Iraq War. Of course, she experienced some of those of her own during her first campaign eight years ago.

But Wolf, she's going through Iowa and New Hampshire, other early states, trying to show that she's a different and more experienced candidate the second time around -- Wolf.

BLITZER: All right, Jeff, stand by. I want to bring in our chief congressional correspondent, Dana Bash, and our chief political analyst, Gloria Borger. If the e-mails start coming out on a rolling basis, Gloria, between now and January, how is that going to play out? How is that going to impact the campaign?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, I spoke with the senior adviser to the Clinton campaign today. And they said to me, "Look, one thing you have to understand is that these are decisions being made by government bureaucrats and not by politicians." Because if it were up to any political candidate, you would never want a kind of rolling coverage about a story that is really not good for you.

But they have absolutely no control over this. And they just have to kind of live with it. And they figure the e-mail story is going to dog them one way or another. But this does stretch it out.

BLITZER: She'd rather get them all out now and not have to worry about it as we get closer to Iowa and New Hampshire than a general election.

BORGER: Exactly. The most -- I think the most candid part of that press conference was her pleading with the State Department to work as fast as they can to get these e-mails out. It's not because she's dying for them to become public. It's because she wants them to become public now or at least not two weeks before the Iowa caucuses.

BLITZER: What are her aides, Jeff, saying about why she finally decided to take a few questions from reporters today? ZELENY: Wolf, I think it's quite simply just her message was being sort of overtaken by all this criticism from Republicans, of course, who are having a field day saying she is not answering questions.

[18:45:01] And even some Democrats had started to join in saying she needs to make her position sort of more explicit on some things. So, it was clear that today seeing the day that she was going to answer a couple of questions.

But, you know, let's be honest about this. She took five questions. She was in good humor, and she wasn't defensive.

But to Jeff's point, five questions is better than zero, but it is only a start. And it's not just from reporters, you know, who are traveling with her, who like to be able to have some contact, just as those of us who are covering Republicans like to have contact with all 675,000 Republicans who are running for president.

But look, I mean, it's not just that. It's also genuine interaction with voters. Yes, she is having them behind the scenes, but it would be nice to be able to witness those for the cameras.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: You know, she doesn't need to get her name recognition up. Everybody knows who Hillary Clinton is. A lot of these Republican candidates want to get well known, and they want to do all this free media, so they can get out there.

Hillary Clinton has a very different problem. She's got reintroduce herself to a public that has been watching her for decades, and she has to seem relatable. And you can't seem relatable if people never see you relate on camera. And so, I think she was sort of starting to do that a little bit, because we're not covering every event on camera that she does with a small group of people in Iowa and putting it directly on the air. So, you know, she has to strike a balance.

BLITZER: How did she do on answering the question about the $30 million she and Bill Clinton took in? Twenty-five million for speaking fees, $5 million for her book -- how did she do in dealing with that question?

BORGER: You know, in my experience covering politics, and I don't know if you agree, but it's never easy for wealthy people to talk about their wealth, you know. Jack Kennedy, whom I did not cover, could joke about it. But Mitt Romney had trouble talking about his wealth.

And so, I think what Hillary did was good an answer as you could possibly give which is, you know, we're blessed. We were able to earn this money. And then -- but I have never forgotten where I came from.

BLITZER: Let me get Jeff.

Jeff, you're out in Iowa. How did it play out there, at least the initial reaction to her answering some questions?

ZELENY: Wolf, I agree with Gloria. I mean, it's always difficult to talk about this. But boy, she didn't step in it like she did the year ago. And she said, "We were dead broke leaving the White House." So, a much different answer from her today. So, it's showing, you know, that she has been practicing and thinking about this.

I thought her answer was pretty good. I'm not sure that any voter I have ever talked to here in Iowa, New Hampshire, any state, begrudges anyone for their wealth. The challenge her for Secretary Clinton is showing that she is empathetic towards voters. I think -- you know, when we see her in these small settings, that's what she is trying to do here.

But I thought her answers today across the board, she was not nearly as defensive as she was in that first press conference that I was at the United Nations a couple of months ago. She was much more relaxed. So, I think this was the beginning of sort of popping that balloon. And look, I remember eight years ago, she was urging the media to ask questions about all the candidates. She said it's the job to put these candidates through their paces.

So, I think she knows that she'll be facing the same thing.

BLITZER: Gloria, on a totally unrelated matter, the vice president, on Beau Biden. You're learning new information. What are you learning?

BORGER: Well, that Beau Biden is at Walter Reed, which was first reported by ABC News. That this has been a struggle for the family since August 2013 when he was first diagnosed with a brain lesion and treated at a cancer center in Houston, and underwent surgery. I've been told this is a serious situation. The vice president is spending an awful lot of time with his son, as you might expect.

BLITZER: We all know Beau Biden is a wonderful man. Let's wish him only, only the best and the entire Biden family. Thanks very much, guys.

Just ahead, a very different story. We're following David Letterman's legacy as he prepares to leave the world of late night television.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: David Letterman fans are bracing for the big good-bye. Tomorrow night, he hosts his final late show on CBS, wrapping up a three-decade career on late night TV.

Like all of us, we have all enjoyed watching Letterman over all of these years at home. I also enjoyed a peering on his show. I was a target of a few of his jokes. I got to deliver a top ten line at least once or twice. I even had a dramatic cameo involving band leader Paul Schaffer, and his cape.

Watch this.

(BEGIN VIDEO CLIP)

(MUSIC)

UNIDENTIFIED MALE: Wolf Blitzer! Wolf Blitzer! Wolf Blitzer!

DAVID LETTERMAN, TV HOST: Beautiful, Wolf.

(END VIDEO CLIP)

BLITZER: It was very funny. CNN will look back at Letterman's career and his impact on late night TV.

My friend and colleague Jake Tapper is here. He's anchoring a special report later tonight.

And I know, Jake, you take a look at some of the funniest moments on the late show.

[18:55:02] Let's watch this. Watch this for a moment.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Can I speak to you a second?

LETTERMAN: Will you people leave me alone? This is an experiment, goddammit! The stuff on the right side is tingling. It's tingling. You know what that means? It's working. That's what that means.

TAPPER: By the late '80s, all the cool kids wanted to hang with Dave, including Jay Leno, who had come up with letterman doing stand-up in the '70s.

JAY LENO: I'm not the kind of guy to brag.

UNIDENTIFIED MALE: Leno was a dream guest. Whatever else was going on, we would say, we got Leno next Thursday.

(END VIDEO CLIP)

BLITZER: So, all right, Jake. What kind of legacy will David Letterman leave behind?

TAPPER: Well, I think he leaves behind a tremendous legacy when it comes to first of all, he was one of the first broadcasters to really show behind the scenes, to show the scenes of the broadcast, the mistakes being made, the cue cards, the guys in the control room. He let the viewer into that world. It's not fairly commonplace, even on news shows, you do that. Much less late night, but he was really an innovator of that.

And also, I think his kind of dry wit really was the zeitgeist for the '80s and '90s, and he had tremendous influence. In this documentary, we talk to Seth Meyers, we talk to Jimmy Kimmel, Conan O'Brien, all talking about the kind of huge influence he leaves behind him.

BLITZER: I know you worked hard on this documentary. Jake, you traveled all over the country. You interviewed all these people. Take us a little bit behind the scenes, and you learned more about David letterman in the course of this reporting, didn't you?

TAPPER: I learned a lot more. I have been such a big fan of his since I was -- when I was a kid in the '80s and '90s. And one of the things that was so interesting to me is the fact that he was so -- he had such self-loathing in that era.

There was such misery, and he was hard on his writer, but very, very hard on himself. He talked about not just the fun times, although the documentary is full of hilarious clips, but also the complex person who caused controversy and obviously had a scandal or two. And then, of course, the big drama of his showdown with Jay Leno over the "Tonight Show." So, there's a lot of human drama in addition to a lot of hilarity.

BLITZER: Well, talk a little bit about that self-loathing.

TAPPER: Well, I mean, he's just a guy who, this is not that uncommon with comedians, but, you know, a lot of his humor comes from a very dark place. And even though he's a very crisp and clean broadcaster and somebody for whom word play is enjoyable, and he always presented a very confident image, he is somebody who has been racked with self doubt and in fact, one of the writers, Steve O'Donnell, who you saw in the clip, talked about how Letterman during breaks would be writing on a pad of paper, I hate myself, I hate myself. And he would underline it over and over.

And I do think that thankfully for David and his family, he has found some serenity, some comfort in the last few years through SSRIs. He takes medication, through meditation, through therapy. Perhaps most importantly, since he became a father, he has an 11-year-old son Harry who he talks about, and I really that's the most potent elixir of all in terms of his becoming a much happier person.

BLITZER: You also know Stephen Colbert is going to be replacing David Letterman in the fall. He will no longer play the character, Stephen Colbert, that we got familiar with in the past few years. You think this is going to work? TAPPER: You know, it's funny. I was actually with him at the White

House correspondents dinner years ago when Colbert got up, left, came back and told me I just signed a deal to do my own show. And my reaction like a jerk was, oh my God, are you going to do that character for the whole half hour, because at the time, he would do it in two or three-minute spurts. I was worried for my friend, is he going to be able to do this character for the whole half hour?

Well, obviously, he was fairly successful in doing the Stephen Colbert character. Now, I can say with complete confidence the actual Stephen Colbert who is a charming and hilarious person, I have no worries about that. The concerns I had were a decade ago about the character he's leaving behind.

BLITZER: We're going to be anxious to see the show later tonight. Jake, thanks very much.

And to our viewers, please join Jake for a CNN special report, "David Letterman Says Good Night." That airs tonight, 9:00 p.m. Eastern, only here on CNN.

Remember, you can always follow us on Twitter. Please tweet me @wolfblitzer. You can always tweet the show @CNNsitroom. Please be sure to join us once again tomorrow right here on THE SITUATION ROOM. DVR the show so you won't miss a moment if you can't watch us live.